Labor, business wage policy battles in big cities

With little momentum on Capitol Hill for much of anything — much less an ambitious package of big wage hikes — labor groups have gone on offense, pushing new proposals that would boost wages to as much as $15 an hour in cities such as Seattle, Washington, Chicago and San Francisco.

Trade associations and business interests big and small are responding in kind — hiring local advocates and beefing up state and local trade associations in a city-by-city fight. It’s all part of a bigger transformation of urban politics — once dominated by pedestrian issues like zoning and trash pickup — into a major battleground on public health, transportation, labor and environmental debates.

Text Size

-

+

reset

“A lot has been stalled,” said Boston Mayor Marty Walsh, who serves as vice chairman of a U.S. Conference of Mayors task force focused on addressing income inequality. “Cities and towns and states have been forced to deal with what’s left behind.”

For liberals and labor groups, what’s been left behind is a progressive economic agenda focused on boosting the fortunes of low-wage workers.

They also see overwhelmingly Democratic city councils and mayors as more receptive than Congress to big minimum-wage and other progressive measures. For example, Seattle’s City Council, composed of eight Democrats and one socialist, voted in June to up the minimum wage to $15 an hour — one of the highest minimum wages in the world, when cost of living is factored in.

“Congressional action could be more sweeping nationally, but state and municipal bodies are more nimble, create an opportunity for acting on policies to make an immediate difference in workers’ lives,” said Peggy Shorey, the AFL-CIO’s director of state government relations, who has worked on wage fights.

Similar fights have unfolded or are unfolding in other cities. While Walmart and other retail lobbying interests were successful in beating back a Washington, D.C., proposal that would have hiked the minimum wage only on large retailers, the D.C. Council eventually voted to raise the minimum wage across the board instead to $9.50 an hour, with wages increasing another $1 per year, to $11.50 by 2017. Chicago has convened a Minimum Wage Working Group that is in the midst of public hearings on the issue, while San Francisco will put a $15 minimum wage on the November ballot.

With cities and progressive activists posing a growing threat to bottom lines, the U.S. Conference of Mayors has emerged as one avenue for corporate America to have a say in municipal policy. The group offers corporations membership on its Business Council — giving them access to urban policymakers and a voice at the table during the conference’s two annual meetings.

In 2003, the Business Council had 77 members. By 2014, growth had swelled membership to 114 — including top corporations and trade associations from all sectors of the economy, such as Walmart, JPMorgan Chase, Google and the American Beverage Association.

Trade associations and lobbying groups representing businesses big and small can no longer afford to ignore urban America’s increasing political clout and importance in the policymaking arena, and national federations are upping their research and communications support for their local chapters.

“When we look at issues like the wage issue, there’s no question that labor is taking this fight to every level of government,” said Katherine Lugar, president and chief executive officer of the American Hotel & Lodging Association.

The AH&LA, restaurant groups, retailers and other Big Business interests are watching the wage fights with intense interest.

”I don’t think it’s rocket science that the less that happens in Washington, the more that the pitched battles are going to make their way down ballot — either at the state or local level,” said Scott DeFife, executive vice president for policy and government affairs for the National Restaurant Association. “I think it is a deliberate tactic by advocacy groups.”

Other national business groups are engaging directly in the fights — convinced that big wage hikes threaten the core of their business models.

“We’ve been spending more time and dedicating more resources on state and local issues than anything else, given that’s where the action is right now,” said Matthew Haller, the senior vice president of communications and public affairs for the International Franchise Association.

The IFA, which represents franchisers and franchisees, is keeping an eye on more than 40 cities and state issues — the most active period on record. “Today’s state and local issues will be tomorrow’s federal issues,” said Haller. “Getting ahead of these issues, monitoring and tracking your opponents and being proactive about where they might go next is critical.”

In Seattle, the IFA brought on a local lobbyist to work on the wage increase in that city — which ultimately passed. After passage, the association brought suit in federal court against the Seattle law — arguing that it’s unconstitutional to treat franchises like large multinational corporations instead of small businesses.

The association is also active in Chicago, with CEO Steve Caldeira writing to the city’s council and Mayor Rahm Emanuel to urge them to treat franchises like small businesses. The city’s wage working group in July agreed with the franchisees, recommending that the city raise the minimum wage on businesses regardless of structure.

In addition to the wage and labor fights, public health initiatives like soda bans have drawn major corporations and their interest groups into urban politics. Meanwhile, big regulatory debates are happening city by city — as transportation startups and sharing economy companies like Lyft, Uber and Airbnb square off against government regulators and entrenched business interests like taxis and hotels.

But for mayors, all politics is a balancing act — pitting the desire for a healthy, vibrant business and labor market against the needs of the population.

“The business community seems to get really concerned about the minimum wage,” said Walsh, Boston’s mayor. But, he said: “if we don’t raise the minimum wage, and people don’t earn more money, then people will be dependent on city, state and federal programs to raise their family and get by.”